[IMGCAP(1)]Most firms understand why they need to grow advisory services, yet many are struggling with the mindset, skill set and tool set to do so. I have used the analogy of someone too busy picking up $10 bills when there are $100 bills on the table. While this doesn’t make sense, neither do the approaches many firms are implementing with regard to advisory services.

Mindset is probably the biggest obstacle, yet too many accountants focus on the technology where their primary tool of choice has been a spreadsheet. A spreadsheet to an accountant is like a crescent wrench to a mechanic. Yes, it will often get the job done, but generally it isn’t efficient and scalable. The 10 areas detailed below deserve your focus if you are serious about growing your advisory services practice.

First, let’s clarify that advisory services are performance and strategic services, and not just compliance services. The three levels can be further defined as hindsight (compliance), insight (performance) and foresight (strategic). When you combine all three, you set the stage for innovation and game-changing performance from the client’s perspective. Isn’t that the ultimate goal … client satisfaction?

Some people may not be comfortable providing advisory services and choose to only be technical advisors. Trusted business advisors must move up the value chain and play above the line.

Here are the 10 key areas:

1. Leader/champion. While technical skills are always important, passion, vision, motivation and the ability to manage a unique ability team are paramount for the leader. This person should be connected, trusted and entrepreneurial. Marketing and selling skills are also important, as is the ability to manage risk. Some of the skills are the same as those that firms seek in a managing partner. These people come with “batteries included.” The position requires a high level of energy and the ability to recognize opportunities.

2. Game-changer mindset. Conventional success is important, but advisory services require a mindset that goes beyond. The game-changer mindset is about always working to create a bigger future for yourself and others because you want it. The game changer is driven to improve and grow. Game changers are willing to change rapidly and have the ability to learn faster than the competition.

3. Value proposition. The cloud and disruptive technology are changing the playing field. As a trusted business advisor, rather than as a trusted technical advisor, you are able to provide clients performance and strategic-based services packaged with compliance services faster, better, cheaper and more easily. Most business leaders desire to focus on growing their business and look at sourcing favorably.

4. Roadmap. Communication is extremely important, as is prioritizing your best opportunities. A roadmap provides direction, establishes priorities, and assigns initiatives along with due dates to responsible parties. Firms that have a plan and are in motion do much better than those that are paralyzed through procrastination. Execution is the key and comes from increased accountability.

5. Menu of services. According to futurist Dan Burrus, “Clients today don’t know what they want, because the things they most want are things they don’t yet know are possible. Give your clients the ability to do what they can’t currently do, but would want to, if they only knew it was possible.” Develop a menu of services from all three areas: compliance, performance and strategic. Many firms have too many clients who only utilize one service (e.g., personal tax), forcing work compression and potentially overstaffing throughout parts of the year. Package and price to improve client satisfaction and cash flow.

6. Pricing strategy/matrix. Hourly pricing does not work with advisory services for multiple reasons. Upfront conversations with potential clients are necessary. Do not make the fatal mistake of starting to record charge time before you have determined scope. Using a pricing matrix can provide guidance with regard to scope of services, target clients, staffing requirements and pricing. A good rule of thumb (target) on small-business clients is 2 percent of revenue (e.g., $5 million company x 2 percent = $100,000). Compliance, performance and strategic services can easily justify this type of fee and greatly benefit the client. Would you rather have five clients who bring you $100,000 each, or prepare a thousand 1040s at $500 a piece? I am confident you see the benefit of larger clients who utilize multiple services. Pricing strategy is generally more difficult in a CPA firm where people are taught that time has value. Value is determined by the customer and not the provider of services. Price by the customer, rather than the service. A matrix may help you start the conversation.

7. Unique ability team. Value should be added by the entire team, not just accountants. In fact, the largest firms are now employing many non-accounting graduates for advisory services (e.g., engineering, computer science, finance and marketing). Diversity makes a firm more valuable and innovative. Skill set is as important as mindset and tool sets. People who are able to focus on their unique abilities have less burnout and are more engaged in their work.

8. Target clients. Clients that helped get you to your current level may not be the clients that will help you sustain success and remain future-ready (relevant). Define your strategic (target) clients and focus on providing them expanded services. While difficult, it may be necessary to terminate a small portion of your clients to free up the capacity to provide more performance and strategic services. Remember the 80-20 rule (Pareto’s Law). Twenty percent of your clients produce 80 percent of your revenue. If your partner compensation system is heavily weighted toward book of business, you may have to change your compensation system in order to change behaviors. Are you targeting and marketing to the right clients?

9. Processes. A process is an organized group of related activities that together create value for clients. No single task creates the desired value. Value is created by the entire process, in which all tasks are merged in a systematic way for a clear purpose. Without processes, firms crumble in chaos and conflict. Every firm has processes; but are the processes as efficient as they should be? Recent advances in applications (software) allow firms to automate more processes and integrate applications.

Many firms have relied upon spreadsheets to manage the processes and data. Inexpensive mobile applications provide capabilities to better manage workflow, schedule resources, manage projects, manage performance, pay bills electronically and manage expenses. Using Lean Six Sigma to define, analyze, measure, improve and control your processes will provide a significant return on your investment.

10. Platform. Technology is disrupting the accounting profession. This is happening for two primary reasons. The first is Kurzweil’s law of accelerating returns and the second is due to the convergence of technologies in multiple areas. Accounting is not the only profession; medicine, law and finance are also being disrupted.

Firms and their clients will benefit from using a business capability model to define requirements, priorities, integration and applications. Unfortunately, the accounting profession has been caught in the fog, rather than focusing on moving to the cloud as quickly as possible. The cloud provides greater collaboration, improved efficiency and less friction in integration. Most of the technology investment (in firms) has been in the products and services area along with financial reporting. In the future, more of the investment will be in innovation, with a high level of return through labor savings. Some of these key areas are business operations, marketing, sales, HR, legal and brand protection, along with business partners (supply chain). I encourage you to learn more about the business capability model.



As you can see from the list, there are significant changes needed in order to take advantage of the advisory services opportunities. In fact, I believe it is transformational, rather than simple change management. Thus the need for the right mindsets (game-changer), skill sets (unique ability team) and tool sets (technology platform).

This journey is about progress and not perfection. If you wait too long to get into action, you run the risk of loss in relevance. It may be time for a strategy session.

L. Gary Boomer, CPA, CITP, CGMA, is the visionary and strategist at Boomer Consulting Inc.

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